Four Ways To Use Your Tax Return Toward a Home Purchase
Your tax refund is a great resource that can be used in many ways toward home ownership. Whatever the amount, a tax refunds feels like a gift of money, even though the money was yours the entire time! When it arrives, it is tempting to treat yourself to a special purchase. Now imagine that special purchase is a new home! Here are four ways to use your tax refund toward the purchase of a new home.
Down Payment
The long-standing 20% down payment is no longer a requirement, however, the more money you put down for a deposit means less money is borrowed. Beefing up your down payment results in:
- Increased buying power
- Lowering your loan amount
- Reduce your monthly mortgage payment
Closing Costs
The cost of processing your home purchase, or closing costs, can range between 2% to 5% of the purchase price and is often an unexpected expenses for a homebuyer. Your refund can be used for:
- Loan origination fees
- Title and Escrow costs
- Prepaid taxes and insurance
Improve Your Credit Score
Your tax refund can go toward paying down debt which can enhance your financial profile. You can bolster your overall financial profile when you:
- Pay down credit card balances
- Reduce high interest debt
- Lower your debt-to-income ratio
Establish a Move-in Fund
Moving into your new home may create expenses not anticipated. Your tax return can be used to assist with the expenses of:
- Moving costs – movers and transportation expenses
- Needed appliances or window treatments
- New furnishings
Every little bit helps when it comes to making any major purchase. Your tax return may be used in many ways, but putting it toward the purchase of a new home is a great way to invest in your future. Visit HolidayBuilders.com to learn more about buildable plans, move in ready homes, and great communities all around Florida. Your new home is waiting. Where do you want to live?
Tags: credit score, down payment, moving expenses, tax refund
